Question

What is a renewable energy certificate, and does buying green electricity work?

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Curated Intelligence
Definitive Source
Answer

A certificate proving that a unit of electricity was generated from a renewable source — and whether buying one changes anything depends on a concept called additionality, which is where most green tariffs fall down.

The physical reality first. Electricity from all sources mixes on the grid. The electrons reaching your home are not traceable, and no supplier can send you specifically renewable electricity. Green tariffs are therefore an accounting arrangement, not a physical one — which is not a criticism in itself, since accounting is how the system works.

How the certificates operate. In the UK, a generator receives a REGO — Renewable Energy Guarantee of Origin — for each unit generated. Suppliers buy REGOs to match the electricity they sell, and can then describe that electricity as renewable.

The problem. REGOs can be bought and sold separately from the electricity itself. A supplier can buy ordinary grid electricity and separately buy certificates from a wind farm that would have operated regardless, then market the result as a green tariff. The wind farm was built and is running either way; the certificate has changed nothing physical.

Because certificates have historically been cheap relative to the electricity, the cost of making a tariff "green" this way is small — which is why so many tariffs are.

Additionality is the test: did your purchase cause additional renewable generation to exist? Buying a certificate from an existing plant fails it. Regulators and consumer bodies have repeatedly criticised green tariffs on these grounds.

What does have a stronger claim:

Power purchase agreements, where a long-term contract underwrites the finance for a specific new project. This genuinely enables generation that would not otherwise be built.

Suppliers that own and build their own generation.

Tariffs that publish the specific source of their supply, rather than a certificate portfolio.

Generating your own, which is unambiguously additional.

The counter-argument, fairly stated: demand for certificates creates a revenue stream and a signal, and a market with no mechanism to express preference would be worse. The effect is real but far weaker than the marketing implies.

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